2015-09-08

China Changes GDP Calculation Starting With Q3

I believe it when they say the change brings China's GDP calculation more in line with international standards. I also think they might find some extra growth during the transition. On second thought, I see the word 灵敏 in there. which could be translated as more sensitive or quicker regarding changes in the short-term. If the NBS is going to produce a more sensitive number in Q3, might they deliver a number needed to justify more aggressive stimulus and currency depreciation?

Sept 9 , the National Bureau of Statistics announced from the 2015 implementation of the accounting reform quarter gross domestic product in the third quarter onwards. Deputy director of the National Bureau of Statistics Xianchun accepted China Information News reporter interview, on the implementation of quarterly GDP accounting reform issues, answered reporters' questions.

Reporter: Why should the implementation of quarterly GDP accounting reform? What is the background?

A: China since 1992 began quarterly GDP accounting, has more than 20 years of history. In this process, the quarterly GDP accounting is objective, timely reflect the short-term health of our economy, serving China's macroeconomic analysis and macro-control, played an important role. However, the current method of quarterly accounting system there are still some areas in need of reform and improvement. Especially in 2008 after the outbreak of the international financial crisis, the community of statistical data put forward higher requirements, hope the statistics can be more sensitive to short-term changes reflect macroeconomic, better for macroeconomic analysis and decision making. In this backdrop, the National Bureau of Statistics from 2009 began to study quarterly GDP accounting issues related to the reform, and in 2011 took an important step forward in the introduction of quarterly GDP growth of velocity data. At the same time, we are actively working with the United Nations ( UN ), International Monetary Fund ( IMF ), the Organization for Economic Cooperation and Development ( OECD Cooperation) and other international institutions, to seriously study the latest theories and international accounting standards internationally quarter, efforts to draw major developed Experience quarterly national accounts for the implementation of quarterly GDP accounting reform has laid a solid foundation. After several years of careful preparation, we believe that the current basic conditions, the time has matured, so now launched this reform.

Reporter: China's implementation of quarterly GDP accounting reform, which have important significance?

A: We believe that the implementation of the quarterly GDP accounting reform, has many positive significance.

First of all, it can be more sensitive to reflect short-term fluctuations of the economy. Quarterly GDP accounting and accounting have accumulated quarterly accounts in two ways. Prior to China's use of cumulative accounting methods, after the reform we will adopt accounting methods quarterly. Compared with the cumulative way, the way of accounting quarterly GDP data to more accurately measure the seasonal economic activity can be more sensitive to capture short-term fluctuations of the information economy. Thus, it can analyze the economic situation and the macro-control provides better data support.

Second, there is conducive to promoting international comparability of quarterly accounting. Quarterly international major developed countries GDP data, usually by way of quarterly accounting. IMF established the Special Data Dissemination Standard (SDDS) also requires Member States to publish quarterly GDP accounting data. We now advance quarterly GDP accounting reform will make our quarterly GDP accounting standards with international standards further for our adoption SDDS create conditions.

Third, to promote the reform and development of China's statistical survey system. Our quarterly GDP accounting had a cumulative way, mainly because the traditional professional survey system is based on the cumulative statistics, basic statistical data is difficult to meet the needs of quarterly accounts. The implementation of quarterly GDP accounting, professional survey put forward higher requirements, will promote the establishment of a monthly or quarterly basis of the professional survey system. It can be said, quarterly GDP accounting reform is a major change in the field of statistics and accounting.

First, change the method of accounting quarter. The quarterly GDP accounting reform, the biggest change is the way the accounting quarter cumulative accounting change from the original quarterly accounting, adjusted the accounting period quarter. That accounted for separately from the original 1 quarter, 1 - 2 quarters, 1 - 3 quarter and 1 - 4 quarter cumulative GDP , to direct accounting of 1 quarter 2 quarter 3 and quarter 4 quarter quarter GDP , the cumulative GDP made ​​when quarter GDP obtained by adding. Accordingly, the use of the underlying data has changed, namely: in the original cumulative accounting, basic data used are cumulative; in quarterly accounts, the direct use of seasonal underlying data. Just no way to divide the underlying data accumulated season mode, you need to be adjusted accordingly, making them comply with the requirements of quarterly accounting.

Second, adjusting the data published content. After the implementation of quarterly accounting, content publishing will be more abundant. National Bureau of Statistics from 2015 of 3 quarter released GDP data, including quarterly price in absolute terms, the absolute amount of quarterly constant prices, constant price quarterly growth year on year and sequential growth, also announced cumulative price in absolute terms, constant price Cumulative absolute terms and constant prices YoY growth.

Third, the revised quarterly GDP historical data. In order to meet the new requirements of quarterly accounting, we 1992 quarter since the GDP data was completely revised, specific results can be found on the National Bureau of Statistics revised on quarterly GDP accounting major revision of the results announcement data, but also to the country Statistics database query more detailed data. Quarter revised GDP and the future published quarterly GDP accounting method is the same, the data are comparable.

It should be noted that, due to the quarterly GDP accounting technically more complex, our country only at the national level quarterly GDP accounting reform, the region has not been carried out quarterly GDP accounting.

Reporter: After using accounting methods quarterly, quarterly GDP accounting data than ever before, what are the characteristics and changes?

A: Compared with the original minus the cumulative accounting pour seasonal data, using accounting methods quarter quarterly calculation of GDP data in absolute terms, speed and structure have been changed in three areas, and showed the following characteristics.

First quarter GDP annual accounting reform because they do not involve changes in accounting methods, the annual GDP in absolute terms will not change, but when 4 quarters of GDP in absolute terms adjusted. Wherein the first, second and third quarter GDP has increased in absolute terms, fourth quarter GDP declined in absolute terms. We believe that each quarter revised GDP accounted for more reasonable proportion. In other words, the essence of the accounting reform quarterly results under the accounting year to maintain the same circumstances, how a more reasonable measure of production activity results of each quarter to make it more accurately reflect the changes between year quarter.

Secondly, the cumulative quarterly accounting and accounting quarterly GDP growth rate changed little. 1992 each quarter since GDP growth year on year at constant prices, the average change in the 0.1 percentage points. However, year on year growth of value added branches, with varying degrees of change.

Third, because after each quarter quarterly accounting of GDP and three industrial added value of the absolute amount of change, the corresponding three industrial structure is also different. For example, a production in the first quarter of each year the proportion of secondary industry declined, the proportion of tertiary industry increased, which is more in line with China in agriculture, construction and industrial production seasonality. Accounting equinox three industrial structure as well as the added value accounted for more reasonable lines, more realistic.

Reporter: With quarterly accounting, Why quarterly GDP data, the absolute amount of the accounting changes and the speed some little change?

A: The implementation of the quarterly GDP after accounting, basic accounting methods used did not change, but the use of statistical data base is different. While cumulative quarterly accounting and accounting professionals are using the same indicators, but accounted for quarterly data using a seasonal basis, and the cumulative accounting data using a cumulative basis. In a cumulative basis of the survey, the cumulative data often contain omissions appearing on the previous quarter, the adjustment is repeated and false positives, thus accumulated through two adjacent quarter GDP data is obtained by subtracting the season it is difficult to accurately reflect the season real. After the accounting change Cumulative quarterly accounting, basic data will be used in the aggregate some changes, but the year-ago rate used to calculate the year did the same adjustment, therefore, the use of these basic accounting data out Quarterly GDP of the absolute amount of change, and the speed is changed little.

Reporter: With quarterly accounting of GDP impact than what the statistics ring?

A: The quarterly GDP accounting tamp GDP qoq basis of statistics. We know that the QoQ data refers to two adjacent quarter comparison. Cumulative accounting methods, there is no ready-made quarter GDP data, only two quarters adjacent cumulative GDP data reduced down to get. And after using quarterly accounts, you can get direct quarter GDP data without indirect calculations. Just introduced, the cumulative result of the accounting and quarterly accounting is somewhat different, accounting quarterly GDP higher data quality, to more accurately measure the seasonal economic activity. Therefore, the use quarterly accounting, will help produce high-quality GDP chain data, more sensitive to reflect short-term changes in the macroeconomic operation.